The Monetary Authority Singapore MAS) and a consortium of big banks including Bank of America Merrill Lynch, Credit Suisse, DBS Bank Ltd, HSBC, J.P. Morgan and Mitsubishi UFJ Group have successfully produced a digital representation of the Singapore dollar for interbank settlement.

The project began in November 2016, and as well developing a ‘digital dollar’, it has also succeeded in testing ways of integrating the MAS Electronic Payment System with a Distributed Ledger Technology (DLT) for automated collateral management.

The White Paper has christened DLT the “Internet of Value”, and concluded, according to FinTech news Singapore, that DLT “has the potential to change the way business is done”, and “boosts efficiency, security and transparency of transactional activities.”

“This effort has confirmed that harnessing the power of collaborative networks can yield demonstrable results and we hope that the progressive stance of all the participants in this project, and especially that of MAS, will inspire similar work in other jurisdictions going forward.”

The report goes on to show that 24 countries around the world are currently investing in blockchain technology, whilst 2,500 blockchain-related patents have been filed over the past 3 years, $1.4 billion of investments made, that 90+ central banks are engaged in preliminary DLT discussions, and that 80% of banks are predicted to initiate DLT projects by 2017.

Deloitte looks beyond cross-border payment and suggests that Smart Contracts, Disintermediation, Crypography, Real-Time Settlement, one-to-one transactions (without third party monitoring) and crime-prevention are also major benefits of using DLT style technology.

An image from the Monetary Authority, Singapore

MAS reportedly want to address concerns around interoperability between platforms, appropriate privacy levels, identification issues and evidence that the platform can be sufficiently scaled and upgraded before it will consider larger-scale adoption of DLT.

As such, MAS plans to launch two further spin-off projects.

The first, collaborating with the Singapore Exchange (SGX) will look at integrating DLT into fixed income, securities trading, and the settlement cycle.

The second, will look at new ways of conducting cross border payments using a central bank digital currency.

“We look forward to the next phases of our project which will develop trial applications for securities settlement and cross border payments.”

Says Sopnendu Mohanty, Chief Fintech Officer at MAS.

Singapore is pulling out all the stops as it vies with London for the right to call itself the world’s biggest and best Fintech hub. Despite the competition, however, the Financial Conduct Authority, Britain’s equivalent of MAS, have signed an agreement with MAS to keep one another informed about emerging fintech trends.